Monthly Archives: June 2018

What should you know about retirement stocks?

The phase of our lives when we are old should be free financial pressure and that is why a question that arises among people is how someone should invest in the long run in order to keep its savings safe and also generating returns. How ordinary people invest should be put into question since most of the time they do not manage to achieve the desired results.

With that being the case, in this material, we will give some hints on how someone should determine whether a particular stock should be a good investment for retirement.

Long-term investments

When it comes to long-term investment it cannot be treated like online trading. You are not constantly buying and selling things, so a different approach is required.

One of the first things to consider when picking up retirement stocks is to look after those companies that have the following characteristics:

  • They are the biggest in the sector of activity (the so-called“blue chips”);
  • They have a measurable performance in the past (you can notice that the way stock performance, in the long run, has a certain repetitive structure);
  • The culture of the company is focused on growth and constant improvement.

You must understand that when it comes to retirement stocks you are trying to aim a return of a few percentage points per year.

Diversification

In order to spread the risk across a handful of assets, you should not focus on just a single stock. Try to find at least five and if you have a bigger budget, you can expand your holdings to other asset classes, as well.

Monitor on a constant basis

Simply buying those stocks without constantly monitoring them won’t be enough. You should be updated with all the news related to those companies you have invested in. We know that some of you have jobs and might find it difficult to allocate time for this activity.

Do it at least on a quarterly basis, if you can’t once a month. Your portfolio should not be fixed and any time you notice something is wrong with one of your holding, shifting to other stocks could be the best decision.

Although you might work in other areas, keep in mind that a little economical background (which can be acquired without going to college) is necessary, so make sure to dedicate yourself as much as you can so you will learn all you need about stocks.

 

How to Invest in Commodities

Commodities represent another interest type of assets and with the advancement of technology one could invest in them without even owning it. You don’t need to order a hundred barrels of oil and keep them in our home anymore. With online trading, you have instruments that are based on commodities and you are simply buying contracts of value for relatively short period of time.

In this material we will tell you how someone could invest in commodities from the comfort of its home. We will also discuss briefly about what trading strategies could be used and when.

Where can you buy commodities?

At a global scale there are two important places where someone could buy an invest money into commodities. One is the CME Group – operating in Chicago, New York City and London, and offers derivatives like futures and options based on interest rates, equity indexes, foreign exchange, commodities and many others.

The second important place is the CBOE or Chicago Board Options Exchange, where options based on commodities are also available.

Last, but not least, any online broker had included CFDs based on the price of commodities, so anyone is able to trade them with leverage from anywhere in the world.

What strategies are suitable for commodities?

There is no specific type of strategy that had been designed solely for commodities. The traditional ones used for forex or stock trading could be integrated in this market, as well.

However, we have to make a specific remark here. Although you can integrate technical analysis and sentiment analysis + risk management in commodity trading, when it comes to fundamental analysis you will need to pay attention to other indicators.

For example, let’s take oil. Each week, the United States publishes its Oil Inventories. Also, there is the OPEC cartel which had been very active in the last few years due to the drop in prices. It had been changing the daily output and that is another factor which influences the price.

In terms of industrial commodities, one aspect that needs to be highlighted here is that China is the largest consumer in the world, so the economic development in China can influence prices, as well.

There are many other important aspects related to commodity investing and that is why we recommend a thorough study and education before jumping in and invest with real money.

How to Start Trading Using Technical Analysis

There is no doubt that technical analysis is one of the most popular when we talk about online trading. However, even though there are a lot of methods using technical analysis which can be profitable in the run, still, most of the traders fail to understand it properly.

With that being the case, we want to explain a bit how someone could start using technical analysis in such a way that in the long run one could constantly develop skills and achieve the desired results.

Since technical methods are very popular in the forex market, we will stick to it and leave other markets for a future material.

Each technical indicator has its role

There is no indicator better than the others and you will find weak points for each one. What is sure, though, is that each one of them functions in a different way and thus you would need to test them (preferably on a demo account) in order to experience yourself various situations and notice how a particular indicator behaves.

The issue of time frame

Whether you should use a small or big time frame for technical analysis is another dilemma. From a statistical point of view, most of the strategies are performing better on higher time frames, but also, an experienced trader will manage to use them effective on small ones, as well.

Since this is a material for those who are at the beginning, you should pick up 3 different time frames (like 1h, 4h and daily, or 30min, 1h and 4h) and learn how to work with them jointly. This system was described in greater detail in Alexander Elder’s book “Trading for a living”, which is a good lecture if you want to go deeper into the online trading knowledge.

Not too many indicators

An overcrowded chart will stop you from seeing some of the price particularities. Instead of that, try to stick to around two indicators that you like and you have understood the best. Maybe you want to use Bollinger Bands and Stochastic, or maybe you like Fibonacci levels the most. It is up to you to choose the one that you like the most.

Don’t forget that there is no magical technical indicator and the key is to find the things that work the best for you. There’s no point for searching the “Holy Grail” because you will never find it.

 

Beginners Guide to Online Trading

It is a fact that online trading could be a good investment opportunity, but in order to be successful in this field you have to do a lot of work. However, we do not want to start heavy on you and also, this material is designed for those who are at the beginning and are just starting to learn about online trading.

Without further a due let’s start and talk about some of the things you need to do as a beginner.

#1 Start with your mind

Education is the most important thing in online trading and most of the traders out there fail to understand that. Your mindset and the way you think will have a huge impact on the results you will have. And because of that, you must begin by laying a good foundation in the journey of online trading.

Try to understand yourself and decide what particular markets you would like to trade. Maybe you like the forex market, or the stock market, or the commodities markets etc.

#2 Master the art of technical analysis

If you want to be an online trader, understanding price movements using technical analysis is one of the most crucial skills you will need. There any many ways you could use it. Since you are at the beginning with online trading, price indicators are a good start. Bollinger Bands, Fibonacci levels, moving averages, etc. are all tools that can work in any type of market with proper education.

#3 A deeper understanding of the fundamentals

Economics are influencing the markets and thus you will need to master fundamental analysis. Each type of market has a certain set of indicators and you need to spot, understand, and monitor them on a constant basis in order to be able to anticipate the market moves.

You must be fully aware that the economic calendar affects your strategy and by ignoring the fundamentals you are going to face some unwanted situations.

#4 All about the mathematics

If you are interested in online trading you must also understand this is risky. Since you are dealing with risk, you must also be aware of some risk management principles that are crucial for your long-term performance.

By understanding the mathematics in the process of trading you can take measures and be proactive in order to avoid losses and keeping you capital safe in the long run.